3 People Who Shaped Money in America: Hamilton, FDR, and Bogle

A handful of people quietly shaped the money system we all use today. In this episode, Ryan tells the stories of three of them: Alexander Hamilton, who built America's financial credibility and credit; Franklin Roosevelt, whose New Deal gave us Social Security, FDIC insurance, and the SEC; and Jack Bogle, who put low-cost index investing within reach of ordinary people.

Ryan and Aaron connect each figure to something you use or rely on right now, from the safety of your bank deposits to the funds in your retirement account. A short, story-driven history that makes the modern financial world make a lot more sense.

Find "Your Fiscal Physical" the book on Amazon

If you have suggestions or feedback, please email us at: Podcast@AlchemyWealth.com

And, as always, Stay the Course!

Transcript

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Welcome To Fiscal Physical

SPEAKER_00 0:01

Welcome to the physical physical podcast. Jordan Stateweek is Mr. Town with the founder of Alchemy Wealth Management and author of your physical physical, Ryan Nelson. Tune in to gain valuable insights and practical tips as we simplify complex financial concepts into digestible lessons. From budgeting to retirement planning, this podcast is your go-to resource for mastering financial literacy.

Aaron Hoisington 0:33

Welcome everybody to this week's uh episode of the Fiscal Physical Podcast. Uh my name is Aaron here with uh Ryan Nelson, founder of Alchemy Wealth Management and uh uh published author. You guys have heard me uh sing his praises for uh many an episode now, too. So uh I'm almost honored and privileged to uh be a part of this podcast with him. And uh Ryan, with that introduction, how are you today, my man? I'm doing really well. How are you doing today? I am doing solid. Anytime that I get to uh increase my fiscal knowledge, I uh I yearn for it. So uh uh you ready to uh dive in for this week's episode? Absolutely. Let's do it. Awesome.

A History Question With Real Stakes

Aaron Hoisington 1:10

So this is a cool one. Uh I uh when I was thinking about this one, I'm I I I uh it's funny. People were like, uh my wife was like, Well, you're kind of a history buff. I was like, not really. I don't really remember that much in certain cases, but I really enjoy history. I'm fascinated by it, to be honest. Like it was one of my favorite subjects in school. Like I used to read heavily on historical battles, events, situations, like, but as I've gotten older, I've just kind of forgotten a lot about it. Like, so I wouldn't consider myself a buff, but I am sure very intrigued by it overall. So um, you know, today we're gonna attempt to take the journey uh the listeners on a journey back in time, and I'm hoping you can help me out with like we're gonna talk about three individuals, maybe more, depending on how many you have, the that that you believe has have shaped uh shaped the future or had the biggest impact on the financial future of the United States. So not a topic I'm super familiar with as far as like these uh this goes, but I'm curious in in your vast knowledge who uh who you have uh uh uh in mind of who who shaped the United States financially.

Ryan Nelson 2:14

Yeah, I I'm uh I'm by no means a history buff. I'm like the opposite of a history buff. So uh uh I I might I may not be the best person to answer this question. Um and this is one I I I had to go and do a little research, uh resort to our good friend Google here and and um kind of dig into some more information. So that was kind

Hamilton And The Idea Of Trust

Ryan Nelson 2:35

of fun. Um but so the three people I came up with was Alexander Hamilton, Franklin D. Roosevelt, and Jack Bogle. Um, so Alexander uh so and again I would yeah let's just dive in. So Alexander Hamilton. The guy from the play. Yeah, yeah. So um so he helped, as I did a little bit of research here, he so he helped sort of um create trust in the banking um and like finance sector, if you will. Um so we've talked in the past, like if there's no trust in the system, like the whole system relies on trust. So we'll we'll kind of go high level, maybe. So Franklin D. Roosevelt, he helped like create trust in the system. Um or sorry, Alexander Hamilton helped create trust in the system. Franklin D. Roosevelt helped like create a protected system, which in some ways sort of also does the same thing, create helps create trust, but it just makes it a more secure sort of um like system. And then I went with Jack Bogle. Um, so we'll talk a little more about him, but I think he uh uh like helped spread access um to the system. So these are three names. There's probably uh a dozen others, and yeah, I'd be curious to see what like our listeners think are maybe the the most influential people people because I'm sure there's um quite a number that deserve to be on this list that that I didn't include here. Um but so Alexander Hamilton, going back to the beginning, so he helped uh like he pushed for a national bank um and he wanted like a stronger federal financing system. Um so he said that basically a country needs to trust to borrow invest it needs trust to borrow, invest, and grow, which I think is a hundred percent true. Um in um like credit is basically it's just trust, trust measured in dollars. So if you go get a mortgage from the bank, um how like if if you come to me and you're like, hey Ryan, I want to go buy a new house, can I borrow money from you to buy this house? How much I'm lending to uh how much I'm willing to lend to you is just basically a reflection of how much I trust you, right? Like I'm like, if I'm pretty confident you're not gonna pay me back, I'm not gonna be very willing to give you very much money, right? Right now, if I have like the utmost confidence that you're gonna be able to pay me back, I've you know, for whatever reason, I have a tremendous amount of confidence. Um I'll it's like, yeah, I'll give you basically all my money because I know I'm gonna be getting it back, right? Um, in the flip side, like if you think about more specifically a mortgage, it's like, well, if you know, I have a little more trust because if something happens, I get to take your house from you and sell it, right? So I know I'll get some money back, right? Whereas if I'm letting you, again, the example we've used for like credit card and you go use it, your credit card to buy sushi, and then you don't make your payment, I can't go get that sushi back and sell it, right? Right. And so um you can start to see, like, okay, yeah, the bank would trust, have a little more trust in lending you money um for a mortgage and less trust lending you money for a credit card, and therefore you can see why credit cards they charge a higher interest rate. Mortgage are typically lower interest rate, right? So I love this idea that credit is like trust but measured in dollars. Was that from Hamilton? Did he say that?

Aaron Hoisington 5:47

Was that a good one? No, no, okay. I was like, that's a heck of a well he might have said this is from Google, but I was like, that's a I didn't I didn't even think it was I was like, oh wow, that is so true.

Ryan Nelson 5:55

Yeah, yeah, exactly. Um so yeah, so I kind of like that idea. But so this was, you know, again, I don't think he I don't think that's a direct quote from him, it's just uh uh from research. But so basically um that con he embraced that concept though. And so that concept that credit is trust measured in dollars, he pushed to have like the US be a more trustworthy um place. And now in like hindsight, as we think if we as we look at like where the US is at today, we you know we say like uh US bonds are the most secure investments in the entire world. And there's lots of other federal governments who buy our bonds because they see it as the most effectively reliable or trustworthy source, right? Right. So we've had so much money flow into our government, even from other governments, even from sort of adversarial governments, because it's the most trustworthy place for them to invest their money. And I think you could all go all the way back to Alexander Hamilton, at least with crediting him with the idea of helping set us on this path of trustworthiness. And had he not set us on this path forward, yeah. I'd just curious how different our country would look if we didn't have like all of the other governments investing in us and all of our citizens investing in us. Yeah, it would be interesting.

Aaron Hoisington 7:13

And it is interesting to think I always you you think of it in the context of like, oh yeah, like we it's it's Alexander Handler, very old, like yeah, it's it's a long time ago. In reality, like compared to like other countries, like we're pretty new. Like you're like this was like 220 plus years ago, like kind of thing. It's not like this was established, you know, it you know, 700 years ago or anything like that, too. It's relatively, you know, we're you know, fledgling when it comes to that. So it's impressive that he was able to like build this and what it's built into as well to at least kind of like start that conversation with it too. So definitely, yeah, I think Alexander Hamilton was a big piece of our our national history.

Ryan Nelson 7:53

Yeah, cool stuff, yeah.

FDR And Building Financial Guardrails

Ryan Nelson 7:55

Yeah. And then so FDR Franklin Roosevelt. So he um so he was around sort of uh, I guess probably the tail end of the Great Depression, but after the the Great Depression, and we've actually talked maybe not directly about him on previous podcasts, but some of what he helped at least achieve. And um, and so during the Great Depression, um, there were some weaknesses in our financial system, or like let's call them cracks that were exposed. Um, so like things like potential bake bank failures and loss, like so. If you had all of your savings in a bank and that bank fails and you lose your savings, well, you're probably not inclined to go put your your savings in a bank ever again, right? Um, and so and there's some ways that like some people could abuse the investment markets and things. And so um he put some um some stuff in place after the Great Depression um to help protect the financial system. Um so one of the things that we've talked about, I know on a past uh podcast was FDIC insurance. Yep. So he helped sort of rest with through FDIC insurance, that itself helps sort of restore trust in banks. We've talked about FDIC insurance actually a number of times, but it gives us confidence that yeah, we can put our money in banks, even if the bank itself fails, it's federally insured, so we know our money's still protected, right? Um so that's kind of cool. He also probably else one of the things I don't know, I would argue if you probably just ask a random person off the street what he's most famous for, it's probably social security. Yep. So starting social security and that kind of the intent there was to give everybody like a baseline amount of money to survive on. Um, but now as we fast forward to today, uh a social security is a large part of many, many people's retirement picture, right? It's a it takes a large piece of the pie of like a lot of people wouldn't be able to have a successful retirement without their social security. Um so yeah, just interesting that that all those years ago, I mean, that would be what 90 years ago or something. Yeah, right around. I don't know. I wonder how old social security must be, yeah, around 90 years, I'm guessing. Um, and so even 90 years later, it's still such an integral part of so many people's retirement picture. I I figured it's gotta he's got to that alone's gotta land him on the list. Um, and then he also went through with some securities uh regulations like through the SEC, so just making uh markets more transparent and safer, so there's less opportunity for abuse. Um so yeah, FDR. Um, so like I said, uh Alexander Hamilton, he sort of started us on the path of like having a nation that's trustworthy. Um FDR then um sort of identified some weaknesses in the system and helped maybe uh protect them um in a way that again, I think almost in hindsight, uh uh gives us more confidence in the system as well. Um and then social security is such a big part of our retirements.

Aaron Hoisington 10:46

Yeah, absolutely. I mean, there's there's m many, many things that I feel like he did that you know, you look back on, you're like, oh wow, like like you mentioned, those things that are still in place, like the FDIC, like insurance, like the uh the social security, all these different areas that like uh I think we talked, I can't remember if we talked about it on the butt like how things like sometimes we uh there's a the uh a movement if you want to uh a topic of uh like oh are we just reinventing things to make them worse? Or like uh um are we uh in this case it was like hey, like these things maybe they've been tweaked a little bit, but like the concept itself, like and I don't know if he specifically came up with this, but it was like him as his administration, like some smart people like during that time that you're like, wow, this is gonna be applicable for a long time. Right and then being able to have an impact like that, absolutely. I could see exactly why he lines on that list for sure.

Ryan Nelson 11:34

Yeah, for sure.

Jack Bogle And Low-Cost Investing

Ryan Nelson 11:36

Um, and then last I said uh Jack Bogle. So he's uh a lot more recent. Um he is the founder of Vanguard, so he's the guy that started Vanguard. He's sort of this uh champion of low-cost index investing, and he's one of the um him and Ben Vanguard, I would say, um, sort of helped this movement of so so ETFs, exchange traded funds, um, are this I'm gonna put in air quotes new because in the grand scheme of like what we're talking about today, they are newer. Um but this like new form of investing that's very tax efficient, very cost efficient, right? And he him through Vanguard helped sort of spearhead this movement. And now low-cost index investing through ETFs is like a very, very common way. Most of our clients here at Alchemy Wealth are invested in ETFs, right? They're using a similar approach, and that is a result. Most of our funds that we're investing in aren't Vanguard. We don't have any issue with Vanguard. We're happy to invest in Vanguard when they're the most appropriate. But what's interesting is like he set us on this path. Um, and even though there's now all these competitors, right? But like he he he largely sort of started that movement. Interesting. And now there's iShares, there's everybody in there, like everybody, every financial institution has their version of a low-cost index fund through that's in the form of an ETF. Um, but he sort of started this movement. Um, so he made it, you know, investing like simpler, clearer, um, more accessible. Um you know, again, costs have gone down, um, they're more tax efficient. And he's a big uh he's he's a big stay the course guy. Um so you can't. Yeah, that's that's gotta make the course. That's gotta make the list alone. Yeah, Jack Bogle. Yeah. Exactly.

Aaron Hoisington 13:22

Um have you ever heard the term Bogleheads? You know, you I was when we were talking about this, I was like, I have heard that term before. I don't I didn't know it was like I didn't know what it was, but I've heard that term. I didn't know it was related to him, too. And I was like, Oh, so what's the um like Jimmy Bubbett has like those people that follow him? Oh yeah, the uh um Parrot something? Parrot heads the the parrot uh um is it parrot? Is it uh oh my gosh, yeah. His his like cult. And it's not a cult, but it's like his his following the uh oh my gosh, what are they are the uh um the oh my gosh heads, yeah.

Ryan Nelson 13:57

Is it the parrot heads? It is parrot heads. Okay, catch it catch it. And then what are uh deadheads or uh yeah, deadheads for the grateful heads? Exactly. Yep and so uh Bogleheads. Bogleheads are like that equivalent, but for like Jack Bogle, I guess, right? So they've kind of like Yeah, they've like you know, I I'm assuming a parrot head is like, you know, only wears Tommy Bahama. Like, you know, uh always has a margarita in their hand, and you know, the deadheads are just like all about um the Grateful Dead, and like you know, these Bogleheads are like you know, all about uh um, you know, oftentimes they're only using Vanguard funds, which now in hindsight is kind of silly because like I said, there's so many of true companies and stuff. Um but uh you know he's he had I guess a big enough following that there's people out there call Bogleheads and they have this cool investment philosophy and stuff. So um yeah, so anyways, I think he helped like create sort of the more modern uh access to low-cost investments.

Who Else Shaped American Finance

Ryan Nelson 14:52

Um so good kind of in hindsight, or uh in summary, if we go back, so I said Alexander Hamilton to create trust in the system, um, Franklin D. Roosevelt to like kind of clean up the system and and put into some things into place that protect the system, so um, both protection, FDIC insurance and then social security, and then Jack Bogle to just kind of bring it, bring the financial system to the masses, let's call it. Nice. Um so I'm confident there's probably some people who deserve to be on that list who aren't. So I'd love to hear who else is on there. But yeah, anybody that was top of mind for you?

Aaron Hoisington 15:21

You know, it's funny when we were putting this together, I was like, oh, like uh Al Alexander Hamilton, just in general, like I like I I I know that one from yeah, from different things. I've seen the play Hamilton, it's it's uh it's awesome. But uh just to talk about the uh the impact that he had of just that way of thinking of like, hey, cool, then now we're you know free from the British, and now what the heck do we do financially kind of piece of it? Like it's like, oh, didn't even think about that piece of it. So like having the the national bank and in these different areas, uh he was the top one on my list here. I mean there's there's a reason why they put it he's on the 10, right? Wait, he's on the $10 bill. Yeah, yeah, yeah.

Ryan Nelson 15:58

So there's a reason why they you did something right if you made it onto uh of currency, I think.

Aaron Hoisington 16:03

Exactly. But it's one of those things too that you're almost like, oh, like is it because obviously he wasn't a president, but like he uh yeah, if you make it onto money, you you you generally have done all right for yourself in general. So um, but you know, I I I think back in like I don't I I'd probably I mean I consider myself a Ryan Nelson head, if that's a thing. Yeah, sure.

Ryan Nelson 16:24

We should make it a thing, yeah.

Aaron Hoisington 16:25

I was workshopping it in my brain during this. I was like, do we want to go with an alchemy head or do we want to go with a Nelson head? Like, what do we want to do with this? A Neller head? Yeah, there's something. There's something there's something there that we'll keep workshopping this. It's got to evolve organically. It does, it does. So listeners, let us know what we should uh what should we we should be calling that. Is it the uh fiscal physical heads? Hard to say. Hard to say what our follow-up's gonna be called there, what we'll wear. So um, but no man, I think as far as like the history goes, like I mean, I when you mention these people, like I didn't know who Jack Bogle was originally, but now I'm like, oh yeah, that the idea of like the access to it is huge. Like the and and and the idea that like simple it can be powerful at the same time, like is like huge. It makes something that could be complex more simple. Like I'm all about that kind of piece of it. So I think these three, I I'd like said, I'd love to hear from other people who who who maybe know a bit more about this, or maybe there's one that you guys really enjoy who's like, hey, this person changed my life as far as like I I I'm surprised the one person that's not on here was Warren Buffett. Oh, yeah. I thought that you might have him on there just because we've also mentioned him a few times, but like I don't know how much change he actually did.

Ryan Nelson 17:33

He didn't even cross my mind. Uh if you were if the if the question was to be like who are the greatest investors of all time, he would be probably number one. Um but yeah, I don't know that he did much besides invest. Right, right. Right, which which in some way he did, I will give him credit. Like uh his success investing like has in some ways popularized investing. You know, it's like because you can only get the benefits of investing if you're investing, right, right? And so the more we see because if you go look at like the Forbes top hundred, you know, richest people in the world, it's like business owner, business owner, business owner, and it's like you know, it's Warren Buffett investing. Yeah, um, so it's kind of cool to see like, oh, this is somebody who just started at a young age, invested for like 80 years, 75 years, whatever it is, and like wow, that has a in tremendous impact. Um, so I do think you know, in hindsight, he has like that has created like this energy or an aura around like, oh, investing can be cool, you can make a lot of money through it, which is awesome. But yeah, I don't know that he like fundamentally changed the finance like industry if you sure.

Aaron Hoisington 18:38

Yeah, yeah, definitely. So that was that was one of the people I was like, oh, I wonder if that guy's gonna make the list. But um, yeah, some some good stuff out there for sure, Ryan. So awesome.

The Personal Side Of Money

Aaron Hoisington 18:45

Well, appreciate everybody joining us today here on this uh this side of the fiscal physical. We'll go ahead and uh take a quick pause, be back on the other side with some uh some personal stuff.

SPEAKER_00 18:54

And now to put the personal in personal finance.

Aaron Hoisington 19:00

Welcome

Most Relaxed Moments And Vacation Rules

Aaron Hoisington 19:01

back, everybody. Thanks for hanging tight with us here. And uh let's dive into the uh the personal section here. And uh you might be hearing a theme if you listen to us every week about kind of compounding or or or going back to questions from previous weeks, too. So if you guys listened to last week's episode, thank you, first off. And uh that the personal question we had last week was what was the most stressed you've ever been? Um and so we're gonna switch that around 180 and go with uh this question for you, Ryan, is uh what is the most relaxed you can remember being in your life?

Ryan Nelson 19:33

Yeah, like I said last week, I mean, I don't have the highest ties or the lowest lows or the stressiest stresses or the most relaxed relaxes or whatever. Yeah. Um but uh yeah, so I don't know. I struggled with this one as well. Um I yeah, I said um being in Mexico, I think there's something about vacations that can be stress-free, right? You don't, you're not logging into your email. You're I'm oftentimes away from my phone a lot more. Sometimes I'll leave it in like a hotel room for an entire day or something. Um, so I that just things that help reduce stress. Um, but then also sometimes uh on vacations, it's like go, go, go, and it's like an adventure to the next adventure or something. And that in itself can create a little bit of stress, or you're exploring a new uh subway system, or you're in a country you can't speak the native language, and that in itself can create some stresses, right? Um, but I do think at these like all-inclusive resorts in Mexico, you know, despite it being in Mexico, they all speak English. And uh yeah, it's just like everything you need is within a hundred yards from you, and like uh people are happy to bring you things. And um, so I think, yeah, a vacation where it's not super adventure-based, but more of like a relaxing-based vacation. So for me, we'll call it uh all-inclusive in uh Mexico.

Aaron Hoisington 20:47

What about it? I love it. I'm right in that same kind of kind of realm with it too. And you hit on a big piece of like one of the things about like traveling. I love traveling, love exploring, love and doing these different things, but there is that level of stress, like getting there and like the the piece of it. And once you're there, like okay, like what do we do next? Like, do we make sure, like, are we safe? Are we these areas and like um also I think the the language piece of it is huge too, of like, oh cool, are we in our uh do I know what's going on kind of element of it? And like you mentioned, like uh I I love Mexico. I've been to a couple all inclusive resorts there, it's it's phenomenal. Love the weather there too. Yeah. Um on my honeymoon, we went to Barbados though, in the Caribbean, and uh that was very similar, but a little more, I guess, uh uh exclusive. I don't know if that's the kind of place of it. But um, it was one of those things you're just slower pace. Definitely much slower pace, a lot less people, like a little bit smaller too, and you're on the beach and you're just like, holy smokes, like and at the time when I went, I didn't have I didn't have a kid, I didn't have a high I I was everything was paid for. I was off for like 15 days of work, and I was like, same thing you did. I left my phone in the room, and I was just like perfect. I I tipped a waiter a lot, and then they just continued. Continued to bring us like drinks or food or anything that we want. And I was like, I we did we spent like two straight days just on the beach, just like hanging out. Then we did some adventures and such too. But like those two first two days, I was like, Well, I think I've peaked. Like that, I don't think I could get more relaxed here. So um, I think that that that definitely same vein, the all-inclusive piece of it, but like having like those necessities taken care of and feeling in a relaxed state is is definitely where and then that that island vibe, is there that that that Caribbean vibe or whatever you want to call it, beach vibe, that's probably a better

Relaxation, Boredom, And Retirement Purpose

Aaron Hoisington 22:34

way to put it.

Ryan Nelson 22:34

There's definitely something nice about that. I do find though, to be honest with you, like I find myself getting bored.

Aaron Hoisington 22:39

Oh, after after I can't, I couldn't do it for like a week. I like I I remember when we were down there, there was this couple from Great Britain who literally had their same exact chairs, they were in the same exact spot for a whole week. I don't know if they ever left that beach except to like go to dinner and like sleep. And I was like, I mean, more respect to you than if you that's how you want it. But at the same time, I was like, Cool, like you know, let's go do an island tour piece of it. Like, I it couldn't do it forever by any means. So there's definitely a limit to that for myself as well, too.

Ryan Nelson 23:11

So yeah, I I even you know, bringing it back to retirement planning and stuff. I think about that like from a retirement standpoint and stuff too. It's like, man, I want to retire. I like the idea of retirement. Also, at the same time, like I like doing things and accomplishing things and like on to the next thing. And so it's like, yeah, I don't know. I don't know what like a retirement really would look like for me. Or like, do I, you know, would I actually be fulfilled not like working, you know, in some way. Uh I don't know. It's just interesting to to think about, and obviously uh we'll we'll all change over the next five, ten, fifteen, twenty, thirty years. And so um, you know, probably not too much stress in exactly thinking about the exact details of that yet. But yeah.

Aaron Hoisington 23:54

So it's good, it's a good point to kind of make about like, hmm. Uh it's one of those I'm like, that'd be a good problem to have. Yeah. I'd like to problem solve that one, yeah. So definitely. Um awesome. Well, appreciate it, Ryan. Thank you so much. Uh thank you, everybody who's listening in as well. We really appreciate it. And uh, Ryan, I'll uh leave it to you to uh have the last words

Stay The Course And How To Reach Us

Aaron Hoisington 24:13

here. As always, stay the course.

SPEAKER_00 24:16

Thank you for joining us for the Fiscal Physical Podcast. Until next time, happy listening. And as always, stay the course. If you have a question or topic suggestions, please email us at podcast at alchemywealth.com. If you enjoyed today's discussion, subscribe to the podcast to ensure you never missed an episode. And consider leaving us a rating and review on your favorite platform. This helps other listeners like you find the show. For more resources, you can visit Alchemy Wealth Management's website at www.alchemywealth.com or find your fiscal physical, the book on Amazon. We'd be remiss if we didn't mention that personal finance is just that. Personal. Please don't take anything we say as advice. The preceding content is for informational and entertainment purposes only. It's not an offer or a solicitation, nor should it be construed or relied upon for tax, legal, or investment advice. It doesn't consider your personal financial situation or objectives and may not be suitable for you.